PORT ANGELES — Clallam County Commissioner Mike Chapman said Monday he would restore the county’s sales tax rate and support a 1-percent property tax increase to generate needed revenue.
He also suggested a temporary hiring freeze to cushion the blow if next year’s revenue projections do not materialize.
“It’s not like I’ve been warm and fuzzy for tax increases,” Chapman said in a board work session, “but with the kind of deficit being projected, I think the responsible thing to do would be to take the 1 percent [property tax increase] as allowed by law.”
Commissioners will hold public hearings on the $36.8 million draft budget for 2016 and the general and road fund levies at 10:30 a.m. and 6 p.m. today at the county Courthouse, 223 E. Fourth St.
The draft budget uses $3 million in general fund reserves, including $2.3 million for ongoing expenses like new staff and a full work week.
Chapman in April joined fellow Commissioners Jim McEntire and Bill Peach in voting for a 0.2-percent sales tax holiday, which had no expiration date.
Although sales tax collections have been rising in recent years, Chapman said the proposed draw on reserves is not sustainable.
“Earlier in the year, we were looking at a much lower use of reserves,” he said.
Commissioners this year reinstituted a 40-hour work week for 37.5-hour employees, added several staff positions and authorized one-time expenditures to stimulate the local economy.
Chapman said the proposed draw on reserves “kind of jumped out at me when I got the final numbers.”
“It was not anywhere near what I was operating under in some of my public support for spending,” Chapman said.
No commissioner said they would vote against the budget, which must be finalized by Dec. 8.
“I plan to ask for a discussion on the budget in January for any modifications that need to be made,” Chapman said.
“I didn’t expect that they would be made now this late, in December.”
McEntire said he was “comfortable” with the budget, which retains the sales tax holiday and does not increase property tax.
Mark Ozias, who defeated McEntire in the general election, will take office on the first week of January.
“Of course, the board of commissioners retains the flexibility to execute the budget in a way that conforms to the revenues as seen, not as expected or projected, but as actually experienced,” McEntire said.
“Next year, the board can do what it chooses.”
Peach said he agreed with County Administrator Jim Jones’ revenue projections for 2016.
The budget projects $33.8 million in revenue with increased economic activity and better outlooks for timber sales, tax collections, intergovernmental revenue and grants, according to an executive summary.
A $3 million draw on reserves would leave a balance of $9.2 million, most of which is restricted for specific purposes.
Chapman said the proposed budget leaves the reserve fund at “basically rock bottom per policy.”
Raising the sales tax rate from 8.2 percent back to 8.4 percent in the first quarter of next year would generate $400,000 to $600,000 in revenue, Chapman said.
“I am not asking you guys to support the 1 percent [property tax increase],” Chapman told his colleagues.
“I’m not asking you to support the reinstatement of the sales tax. I am stating that I will support the reinstatement of the sales tax.”
Chapman, in his 15th year as commissioner, predicted that the new board would be faced with “tough choices” in 2016, including possible program cuts and layoffs for soon-to-be-hired employees.
Chapman did not attend the annual series of budget meetings with department heads to allow his colleagues to “put a budget together without my input.”
“So I sit here with no moral authority to criticize,” Chapman said.
“I will support the budget because it will be amended next year anyway. But if I were so inclined, I would support the 1 percent property tax levy [increase] and the reinstatement of the sales tax.”
Meanwhile, commissioners Monday postponed a call for a hearing for proposed changes to the county’s financial, investment and debt policy because county Treasurer Selinda Barkhuis was not in attendance.
Chapman said it would be “inappropriate” for the board to discuss such matters without input from the elected treasurer, who was invited to the work session.
Commissioners said they would ask the Finance Committee to review the policy in January before holding the public hearing.
In other board discussion, Jones reported that he had reduced the investment interest projection in the draft budget from $500,000 to $300,000 at the behest of Barkhuis, who said in pointed Nov. 23 email to county officials that the revenue projection was too high.
Jones told Barkhuis in a Monday email that the change “would have happened earlier” had she expressed her preference in the budget meetings she missed in September and October.
Barkhuis had previously noted an objection to a “total lack of transparency associated with this year’s budget process.”
Jones countered that the 2016 budget process was “more open and transparent than any in the last 20 years of Clallam County government.”
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Reporter Rob Ollikainen can be reached at 360-452-2345, ext. 5072, or at rollikainen@peninsuladailynews.com.